US President Joe Biden has vowed to bind those responsible for the failures of Silicon Valley and Signature banks while assuring Americans that their deposits are safe.
On March 12th, the New York Financial Services District (NYDFS) acquired a crypto-friendly signature bank. The Federal Reserve also said the closing of the undersigned banks was done to protect the U.S. economy and strengthen public confidence in the banking system.
It also announced a $25 million fund aimed at helping certain banks that may face liquidity problems in the future.
U.S. President Joe Biden, speaking to his 29.9 million Twitter followers on March 13, congratulated government agencies on “reaching a solution that protects workers, small businesses, taxpayers, and the financial system.” said there is.
on my instructions, @SecYellen My Director of the National Economic Council has worked with banking regulators to address the issues of Silicon Valley banks and signature banks.
I’m glad they’ve arrived at a solution that protects workers, small businesses, taxpayers and our financial system. https://t.co/CxcdvLVP6l
— President Biden (@POTUS) March 13, 2023
The president also added that he was “firmly committed” to “holding fully accountable” those responsible for the disruption. “I have more to say,” he added in a speech on Monday, local time.
Meanwhile, many other U.S. politicians have also shared their admiration for recent federal regulator actions aimed at stemming the contagion from recent bank failures.
US Senator Sherrod Brown and Congressman Maxine Waters said they are pleased that both insured and uninsured SVB depositors will be covered. according to March 12 statement by the U.S. Senate Banking and Housing Committee:
Today’s actions will allow workers to get paid and small businesses to survive, while also giving depository institutions more liquidity options to weather the storm. ”
“As we work to better understand all the factors that have contributed to the events of the past few days, and how to strengthen the guardrails of the big banks, we are asking financial regulators to ensure that the banking system remains stable, strong and resilient. We urge you to keep your sex and make sure your depositors are kept, your money is safe,” the statement added.
Silicon Valley Bank depositors, both insured and uninsured, are complete with plans from the FDIC, Federal Reserve, Treasury, and White House. The Fed also created a new facility to support all banks that need liquidity to keep the banking system safe.
— Maxine Waters (@RepMaxineWaters) March 13, 2023
Meanwhile, U.S. Securities and Exchange Commission Chairman Gary Gensler has used the opportunity to double down on his agency’s pursuit of fraudsters, without specifically naming the industry.
The chairman emphasized in the March 12 report that the SEC is monitoring violators of US securities laws. statement:
“In times of heightened volatility and uncertainty, the SEC is particularly responsible for monitoring market stability and identifying and prosecuting all forms of fraud that could threaten investors, capital formation, or markets more broadly. We focus on that.”
“If we discover violations of federal securities laws, we will investigate and take enforcement action without speaking to individual entities or individuals,” the SEC chairman added.
With $3.3 billion of Circle’s $40 billion USDC reserve held by the SVB, the closure of the SVB has temporarily unpegged Circle’s USD Coin (USDC) to $0.88.
However, USDC is almost back to $1 after the Federal Reserve confirmed that all customer deposits at signatory banks and SVB will be made “full”.
Related: US Federal Reserve Announces $25 Billion Funding for Backstop Banks
Another prominent crypto bank, Silvergate Bank, announced last week that it would be closing and voluntarily liquidating “in light of recent industry and regulatory developments.”
Shortly after, Gensler I have written A March 9 opinion piece in The Hill threatened US cryptocurrency firms to “operate within the law” or take coercive action.
as chairman @SECGov, I have one goal when it comes to the crypto market: to ensure that investors and markets receive all the protection they receive in other securities markets. how?
read my editorial @thehill:
— Gary Gensler (@GaryGensler) March 9, 2023